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Hong Kong,Sports

LeTV Unveils Aggressive EPL Prices

LeTV has announced potentially disruptive pricing and packaging for English Premier League (EPL) football in Hong Kong, after securing the rights to the next three seasons.

Customers who have already signed up to LeTV’s membership plan, at HK$990 (US$128) for 12 months, can purchase games by the month, or for three months, or for a single season.

LeTV is charging an average price of HK$169 per month for an add-on package for one season.

At the same time, new as well as renewing subscribers to broadband provider HKBN, a LeTV partner, can also buy the games for HK$99 per month as part of a special bundle.

LeTV is also offering free trials to its Premier League package for people buying its plug-and-play OTT set-top-boxes (available at any 7-11 store), as well as for select purchases of its smartphones and smart TVs.

The company needs to leverage its EPL rights for the 2016-2019 seasons, recently acquired for a whopping US$400 million, to establish a subscriber base, along with a broader content offering (both sports and non-sports), which it has started to do.

The company has signed deals with international content providers Disney, Rewind Networks and RTL-CBS for Hong Kong.

It also has secured Chinese movie content from Celestial Movies, Golden Scene, Orange Sky, Golden Harvest, Fortune Star Entertainment, My Way Film and for TV, Sanlih.

Device-Led distribution

LeTV's OTT platform includes a VOD library as well as linear channels.

The OTT platform is hard-bundled with three LeTV produced devices: (1) A LeTV set-top box, on sale for HK$499; (2) LeTV smart TV units, costing ~HK$2,000 for HD and HK$11,000 for the high-end 4K version, excluding bundled discounts; (3) LeTV smartphones, priced between HK$1,500-3,000.

LeTV’s hardware plus OTT strategy has already made headway in mainland China.

It has sold more than 4.5 million smart TVs, branded Super TV, since launching in July 2013, giving LeTV a 10% market share.

This is impressive, given LeTV’s recent entry into the market and that leading brand Skyworth only has 20% share.

LeTV has also sold 3 million of its Super Phone smartphones, since introducing the line in April.

About 50% of LeTV's smartphone customers have opted for a bundle with its OTT service.

While LeTV’s hardware is at par with major consumer electronics brands such as Samsung, its OTT library largely consists of mainland Chinese programming, Korean content and a few, non-exlusive Hollywood titles.

Creating a compelling product for the Hong Kong market will require further content investment however, as well as curational and packaging expertise, which the company appears keen to do as part of a long-term investment plan.

Fertile ground

Hong Kong’s robust broadband ecosystem makes it an ideal but small market for OTT services.

Industry analysts Media Partners Asia (MPA) estimate that there will be 2 million fixed broadband subs (70% on fiber) and 13.3 million wireless broadband subs by end-2015.

Pay-TV penetration, adjusted for multiple subscriptions in a home, stands at 87% of TV households, according to MPA. Total pay-TV industry revenues, including subscription and advertising, will top US$735 million by the end of the year.

OTT competition is intensifying, however. Netflix aims to launch a Hong Kong service in 2016.

Furthermore, Now TV and TVB, the city's leading pay-TV operator and free-to-air broadcaster respectively, are also investing in Chinese content production, as well exclusive partnerships with Korean and Hollywood players to drive both linear and on-demand services.

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